Bank reforms slammed by Cruickshank

NEW BANKING rules will fail to promote competition in the sector, City grandee and former banking reformer Sir Donald Cruickshank warned yesterday.

The government has called for the expansion of so-called challenger banks to take market share off the bigger players and give consumers more choice.

Increased competition “would oblige bankers to think about the relationship with customers, to listen to customers, to be alert and act on complaints in a way they do not now,” the former London Stock Exchange boss told the Parliamentary Commission on Banking Standards (PCBS). And Sir Donald said the proposed rules are not going to change that. The government should “charge somebody with competition powers to implement personal and SME account portability. Without this change, competition will not flourish,” he warned.

In his written evidence to the PCBS, Sir Donald also attacked the plans to give more prudential regulation powers to the Bank of England.

“Do not implement the huge concentration of power in the BoE that is inherent in the government’s proposals for banking reform. Therein lie the roots of future crises,” Sir Donald wrote.